I can’t count all the times we have heard “According to Zillow the value of my home is…” or “But Zillow says that house is only worth…” Although Zillow is a useful tool and powerful resource for homeowners and buyers alike, it isn’t a source you should use to plan your estate, make your future plans, or necessarily the offer you should submit on a property.
A Zestimate from Zillow is basically an algorithm and should not be used to replace a appraisal or an opinion of value from a seasoned real estate Broker. In other words, a Zestimate is a pricing model applied to every home in the country. And to put it more bluntly…Zillow has never physically stepped foot into a home or a neighborhood. As we all know in Jackson County, pricing varies drastically based on location, views, amenities, types of construction, and the list goes on. Real estate sales are also driven by supply and demand which can make pricing fluctuate 5-10% alone.
Still don’t believe us? In Zillow’s own words they clearly state: “The Zestimate home valuation is Zillow’s estimated market value, is computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. We encourage buyers, sellers and homeowners to supplement Zillow’s information by doing other research such as getting a CMA (comparative market analysis) for a real estate agent, an appraisal or VISITING THE HOUSE.” If you review the data coverage and accuracy table for Zestimates in our area (see chart below) it is quite surprising how many times they get it wrong. It is up to 60%. Imagine ordering food from a restaurant and knowing there was only a 60% chance it would come the way you ordered it.
Don’t get us wrong. We have learned to love Zillow and all it offers both us as Brokers and for our clients. Their online tools and searching abilities are very easy to navigate and we won’t argue it serves a great purpose. But we also want our community to be aware that there is a reason agents charge a commission and Zillow is free. When you hire an agent to represent you in a sale or purchase you are tapping into hundreds if not thousands of transaction experience, as well as knowledge of current real estate policies, and current pricing trends.
Find a Realtor you can rely on as you evaluate your real estate related investments. There is no question it will make a difference. In the end, you really get what you pay for… not just with Zillow, but also with any scope of representation. Utilize Zillow as a resource but don’t rely on it as gospel. The decisions you are making are much too important to lean on the advice of a computer program.